TIDMIOM
RNS Number : 5843U
Iomart Group PLC
07 April 2021
7 April 2021
iomart Group plc
("iomart" or the "Group" or the "Company")
Pre-close Trading Update
iomart Group plc (AIM: IOM), the cloud computing company,
provides its pre-close trading statement for the year ended 31
March 2021 ahead of the announcement of its full year results.
Group trading performance
iomart expects to deliver a continued stable financial
performance in the second half of the year. The third, and
unexpected, COVID-19 UK lock down hindered the green shoots of
growth we had expected in the second half of the year, causing
results to be at the lower end of expectations. However, the Group
remains strongly profitable, and the Board is confident iomart has
a strong basis for growth once UK business confidence returns and
the strategic actions currently in progress under new CEO Reece
Donovan have been fully implemented.
For the year to 31 March 2021, the Group expects to report
revenue of approximately GBP112 million (FY20: GBP112.6 million),
adjusted EBITDA (1) of approximately GBP41.5 million (FY20: GBP43.5
million) and adjusted profit before tax (2) of approximately GBP20
million (FY20: GBP22.8 million). We have seen revenue growth within
our core area of managed cloud services, but overall the Cloud
Services division experienced a contraction, primarily due to a
drop in non-recurring hardware reselling activities as customers
delayed investment decisions. The Group has maintained its sales
team throughout the COVID-19 pandemic in order to position the
Company optimally once business confidence returns and has not made
use of any Government furlough support. This, combined with the
specific mix in revenue in the year, has resulted in a lower
adjusted EBITDA margin of approximately 37.1% (FY20: 38.6%). This
margin level remains higher than the industry average and
consistent with expectations.
The Group's cash generation has been strong and ahead of the
Board's expectations, with the year-end cash position increasing to
approximately GBP23 million at 31 March 2021 (31 March 2020:
GBP15.5 million). The revolver loan drawn amount remains unchanged
from last year and along with lease liabilities the Board expects
net debt to be approximately GBP56 million at 31 March 2021 (31
March 2020: GBP57.6 million).
Outlook
The Group's revenue profile continues to transition away from
legacy self-managed infrastructure revenue to managed cloud
revenue, which by its competitive nature tends to have initially
lower margins which expand over time and represent a better long
term growth opportunity. This trend will continue as the Group
refocuses towards higher growth sectors, with managed cloud
services at the heart of the iomart offering. While the success of
the transition will take time to flow through into results, the
Board is confident iomart's valuable datacentre and network
infrastructure, market-leading cloud expertise, highly recurring
revenue and significant customer base means the business is well
positioned to execute on its strategy and return to an accelerated
growth trajectory over the medium term.
The Board expects to continue to use selective M&A to
augment the growth strategy. The Group's strong balance sheet
allows the proactive consideration of acquisitions to broaden the
Group's skills and capabilities in new areas.
The Board remains confident in the outlook for the long-term
prospects for iomart.
The Group will host a Capital Markets Day on 5 May 2021, to
provide greater insight into the evolution of its strategy.
Reece Donovan, CEO of iomart Group plc, commented:
"iomart has performed resiliently during these unprecedented
times, proving the strength of our recurring revenue model, the
value our customers place on the services we deliver, and the
commitment of our teams. We are in a period of transition for
iomart, building on a strong starting position in terms of our
financial strength, business model and market position. We look
forward to updating investors further on our revitalised strategy
at the Capital Markets Day in May. We have high confidence levels
on the future success of iomart and our ability to be a leading
cloud service provider, supporting customers in each step of their
cloud journey."
(1) adjusted EBITDA means earnings before interest, tax,
depreciation, amortisation, share based payment charges, gains or
losses on revaluation of contingent consideration, acquisition
related costs and non-recurring items.
(2) adjusted profit before tax means profits before, tax, share
based payment charges, amortisation of acquired intangibles, gains
or losses on revaluation of contingent consideration, acquisition
related costs and non-recurring items.
For further information:
iomart Group plc Tel: 0141 931 6400
Reece Donovan, Chief Executive Officer
Scott Cunningham, Chief Financial Officer
Peel Hunt LLP (Nominated Adviser and Joint Tel: 020 7418 8900
Broker)
Edward Knight, Paul Gillam, Nick Prowting
Investec Bank PLC (Joint Broker) Tel: 020 7597 4000
Patrick Robb, Virginia Bull, Sebastian Lawrence
Alma PR Tel: 020 3405 0205
Caroline Forde, Helena Bogle, Joe Pederzolli
About iomart Group plc
For over 20 years iomart Group plc (AIM: IOM) has been helping
growing organisations to maximise the flexibility, cost
effectiveness and scalability of the cloud. From data centres we
own and operate in the U.K., and from connected facilities across
the globe, we can provide multiple secure infrastructure solutions
from branch office backups, to hyper cloud migrations, and
everything in between, delivered typically with a 24/7 managed
service. Our team of over 400 dedicated staff work with our
customers at the strategy stage through to delivery and ongoing
management, to implement the secure cloud solutions that deliver to
their business requirements.
For further information about the Grou p, please visit www.iomart.com
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